Leisureworld to Acquire 160 Bed, "A" Class LTC Facility in Orleans, Ontario

MARKHAM, ONTARIO--(Marketwire - Jan. 12, 2012) - Leisureworld Senior Care Corporation (TSX:LW) today announced that it has entered into an agreement to acquire the Madonna Long-Term Care Residence, a 160 bed, "A" Class facility in Orleans, Ontario, a suburb of Ottawa. The facility's current occupancy rate is 99.4%.

The purchase consideration for the transaction is $20.1 million, comprised of $13.4 million for the operating business and approximately $6.7 million of construction funding. Incremental expenses for transaction and land transfer costs are expected to be approximately $1.1 million. Subject to approval by the Ontario Ministry of Health and Long-Term Care and the LHIN (Local Health Integration Network), the transaction is expected to close in 2012.

Leisureworld intends to finance the acquisition with a combination of approximately $5.3 million in cash and working capital, and the assumption of $15.9 million in debt, at an all-in rate of 5.2%. Following the closing of the transaction, the Company's Debt to Gross Book Value ratio is expected to increase slightly to 53.1%.

The Madonna facility generated $1.1 million in net operating income after management fees of 3% in 2010, representing a cap rate of 8.41%, excluding the $10.35 per resident, per day construction funding. Leisureworld management expects that the integration of the Madonna facility with current operations will present an opportunity to leverage existing infrastructure costs, thereby improving the effective transaction cap rate. The transaction is expected to be accretive to Leisureworld's Adjusted Funds From Operations (AFFO) on an annual basis.

"The Madonna facility is an excellent addition to our business. It enhances our existing portfolio of "A" Class LTC homes in Ontario and builds our broader seniors living market presence in the Ottawa area," said David Cutler, Chief Executive Officer of Leisureworld. "Further, the transaction is consistent with our commitment to make acquisitions that are accretive to AFFO, thereby adding further support for our attractive dividend stream."

The Madonna facility, which was completed in 2007, has a 60/40 private/shared accommodation ratio and features numerous amenities and a variety of services to promote and maintain resident health and wellness. This includes 24-hour nursing and personal care, supervised assistance with daily activities, weekly physician visits, health care monitoring, rehabilitation/restorative care services and palliative care services.

About Leisureworld

Leisureworld is the third largest licensed long-term care (LTC) provider in Ontario. The Company owns and operates 26 LTC homes, representing 4,314 beds across Ontario, Canada. Leisureworld also owns and operates three retirement residences comprising 323 suites and one independent living residence with 53 apartments. Leisureworld subsidiaries include: Preferred Health Care Services, an accredited provider of professional nursing and personal support services; and Ontario Long Term Care, a provider of purchasing services, dietary, social work, and other regulated health professional services. For more information, please visit the Company's website at: www.leisureworld.ca.

Forward-Looking Statements

Certain of the statements contained in this news release are forward-looking statements and are provided for the purpose of presenting information about management's current expectations and plans relating to the future. Readers are cautioned that such statements may not be appropriate for other purposes. These statements generally use forward-looking words, such as "anticipate", "continue", "could", "expect", "may", "will", "estimate", "believe" or other similar words and include, among other things, statements related to the Company's financial results or strategic plans. These statements are subject to significant known and unknown risks and uncertainties that may cause actual results or events to differ materially from those expressed or implied by such statements and, accordingly, should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such results will be achieved. The forward-looking statements in this news release are based on information currently available and what management currently believes are reasonable assumptions, including the funding of long-term care facilities by government entities. Other material factors or assumptions that were applied in formulating the forward-looking statements contained herein include the assumption that the business and economic conditions affecting Leisureworld's operations will continue substantially in their current state, including, with respect to industry conditions, general levels of economic activity and government regulations.

Although management believes that it has a reasonable basis for the expectations reflected in these forward-looking statements, actual results may differ from those suggested by the forward-looking statements for various reasons. The assumptions, risks and uncertainties described above are not exhaustive and other events and risk factors could cause actual results to differ materially from the results and events discussed in the forward-looking statements. These forward-looking statements reflect current expectations of Leisureworld as at the date of this news release and speak only as at the date of this news release. Leisureworld does not undertake any obligation to publicly update or revise any forward-looking statements except as may be required by applicable law.